Benchmark Cuts Price Target on DigitalGlobe (DGI), Sees White House Study as Positive

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DGI Hot Sheet

Rating Summary:
6 Buy, 0 Hold, 1 Sell

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Up

Today's Overall Ratings:
Up: 19 | Down: 16 | New: 82

Benchmark is reiterating its Buy rating on shares of DigitalGlobe (NYSE: DGI), but is reducing its price target from $32 to $24.

The 10 percent spending cut in the NGA’s EnhancedView program should not effect the company's GAAP sales and earnings expectations for fiscal 2012, reports the firm.

An analyst at Benchmark comments, "we think the recent study ordered by the White House on the EnhancedView commercial satellite imagery program, due in April, should help support the program in the upcoming budget battle for FY13 and beyond. According to AOL Defense, interviews with former intelligence officials reveal that cutting EnhancedView does not make much sense since the program was developed in part to cover gaps from the government-owned classified spy satellites and since a strong need for imagery still exists today even without the wars in Iraq and Afghanistan."

The firm estimates EPS of $0.13 on $333 million in total sales for FY11. For FY12, Benchmark forecasts EPS of $0.71 on $383 million in total sales.

For an analyst ratings summary and ratings history on DigitalGlobe click here. For more ratings news on DigitalGlobe click here.

Shares of DigitalGlobe closed at $16.96 yesterday, with a 52 week range of $13.59-$32.82.

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